Advertisers To Spend 15% More On Paid Search This Year

by Laurie Sullivan, Jun 22, 2012, 1:12 PM

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Google IO begins next week. If you're an online marketer, I don't need to tell you the Mountain View, Calif. company owns the majority of the search market share, but perhaps you might want to know the latest search engine marketing growth predictions for desktop and mobile. And you might want to know some of the news to expect next week from the tech giant.

Kantar Media Compete reports trends in search market share for May, with Bing and Yahoo's respective share of the market rising slightly, and Google's declining. The overall search market -- as defined by these engines along with AOL -- experienced a 2.5% rise in sequential volume, the second volume increase since December 2011. 

More specifically, Bing gained 0.3 points and Yahoo gained 0.1 points, driving the Bing Powered market share to 33.7%. Google’s share declined by 0.4 points, and now holds 65.5% of the market. AOL's share remained unchanged at 0.8% for the third month in a row, according to Compete.

In the Advertising Expenditure Forecast for June 2012, Publicis Groupe company ZenithOptimedia estimates advertisers will spend about 15% more in 2012 on paid-search marketing, up 15% in 2013, and 13% in 2014. The report points to three growth drivers: new opportunities to create custom experiences, integration of four screens, and an uptick in mobile.

Mobile paid-search spend sits at 15% of all paid-search spend, up from 5% in April 2011. Mobile paid-search clicks comprise a quarter of all paid-search clicks. "Smartphone and tablet cost per clicks (CPCs) continue to trend lower than desktop due to better targeting opportunities on mobile, specifically for local searches, which increases relevancy," according to the report.

Today, mobile CPCs remain relatively low compared with desktop, but the study points to mobile CPCs rising due to more competition as major shopping days and holidays approach, beginning with back-to-school in mid to late summer.

A reality check with search engine marketing experts reveal that second-quarter 2012 search budgets should grow between 15% and 20% compared with the prior year, according to Citi Analyst Mark Mahaney. "CPC trends appear to remain negative, although there are select signs of improvement," he wrote in a research note published Friday. "Mobile continues to be viewed as an Incremental driver of search spend and not as a headwind."

If you're an online marketer, you also know we've entered the dawn of mobile advertising for both search and display. After all, today's pocket-size devices have "more computing power than all of NASA back in 1969, when it sent two astronauts to the moon," according to physicist Michio Kaku, who predicts technology advances during the next 100 years in the book "Physics of the Future," published earlier this year.

The biggest problem with advancements in mobile marketing remains that marketers will earmark just a fraction of online advertising budgets to mobile, although platform providers will continue to sink millions of dollars in building out the infrastructure. U.S. mobile-ad spending should grow 80% to $2.61 billion in 2012 -- up from $1.45 billion in 2011 and $769.6 million in 2010, according to research firm eMarketer.

The Mountain View, Calif. company continues to build a network of developers similar to Microsoft. The arrival of the Google IO conference next week continues to spark a flurry of announcements in mobile. For instance, Jelly Bean will likely become the name for Google's next version of Android OS, and Android users might soon see developers responding to their reviews in the Google Play Store. Two-sided conversations between developers and users will ultimately yield better apps, according to Google.

Stay tuned. 

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